Charts of the Week Topics Covered This Week Include: Real Estate In The U.S. How Much Equity Do You Have In Your House? Deleveraging Fixed Income Holdings/Purchases Private Credit vs. Total Credit The WTI/Brent Spread Who Owns Agencies? Treasury Issuance vs. Equity Issuance The November Election Household Net Worth Foreign Holdings Of U.S. Assets Defined… Continue reading Charts of the Week
The Financial Times – Hedge fund sceptics warn on ‘QE Infinity’ “A man’s got to know his limitations,” says “Dirty Harry” Callahan, the gun-toting, rule book-ignoring cop immortalised by Clint Eastwood in Magnum Force. It is a principle the US Federal Reserve – which earlier this month embarked upon its own, third bout of “unorthodox”… Continue reading More QE3 Criticism
<Click on chart for larger image> The Financial Times – Spain’s borrowing costs rise sharply Spanish ten-year bond yields have risen above 6 per cent for the first time since early this month as fears mount over political turmoil in the eurozone’s fourth-largest economy and delays in its bank rescue plan. The yield demanded by… Continue reading Trouble In Spain
<Click on chart for larger image> The Wall Street Journal – Housing Market Displays New Vigor as Prices Rise Home prices notched their strongest year-to-date gains since 2005, climbing 5.9% through July and signaling the housing market’s steady trudge toward recovery. The rising prices in Tuesday’s Standard & Poor’s/Case-Shiller 20-city index could play a pivotal… Continue reading Home Prices Rise Again
CNBC – Greek Protestors Seek ‘Stay of Execution’ on Bailout Violent protests erupted on the streets of Athens on Wednesday. They could help the Greek government make its case for less stringent bailout conditions to its international creditors. Market focus has turned away from Greece towards larger Spain since Greece’s June elections. That does not… Continue reading Trouble In Greece
Project Syndicate – Central Banks on the Offensive? It looks like a coordinated offensive: on September 6, the European Central Bank outlined a new bond-buying program, letting markets know that there were no pre-set limits to its purchases. On September 13, the United States Federal Reserve announced that in the coming months it would purchase… Continue reading Central Banks
Reuters.com – Fed’s Plosser: Opposed to risky QE3 because it won’t work The Federal Reserve’s latest monetary stimulus will not do much to boost economic growth or lower unemployment and raises the risk of longer-run inflation, Philadelphia Fed President Charles Plosser said on Tuesday. Plosser, an inflation hawk, said he opposed the U.S. central bank’s… Continue reading Charles Plosser Speaks
Bloomberg.com – Fed Helps Lenders’ Profit More Than Homebuyers:Mortgages The Federal Reserve’s latest mortgage bond purchases so far are helping profit margins at lenders including Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM) more than homebuyers and property owners looking to refinance. Since the Fed’s Sept. 13 announcement that it would buy… Continue reading Who Is The Federal Reserve Helping?
AdvisorPerspectives.com – Jim Bianco – Markets Will Benefit From Disastrous Fed Policy The Fed’s quantitative easing policy will be “disastrous,” according to Jim Bianco, but prices for riskier assets will rise over the near term as a result. In remarks last week, Bianco, the head of the Chicago-based economic research firm that bears his name,… Continue reading The Boston Security Analyst Society Luncheon
The Financial Times – Martin Wolf: Why exit is an option for Germany Should Germany leave the euro? It is, after all, the big country with an obvious exit option. The question becomes more pertinent after the decision by Angela Merkel, Germany’s conservative chancellor, to support Mario Draghi, president of the European Central Bank, against… Continue reading Would Germany Leave The Euro?
The Wall Street Journal – British Banks Step Back From Libor Role The British Bankers’ Association is preparing to give up responsibility for the London interbank offered rate, or Libor, the scandal-plagued benchmark interest rate that the group once called “the world’s most important number.” The council of the BBA, a private trade association, voted… Continue reading BBA Giving Up LIBOR Oversight Responsibility
FT Alphaville (FT Blog) – A time of hoarding and inflation fears, 1930s edition It’s easy to confuse the above for contemporary comment, but… the two clippings actually originate from the New York Times archive, circa 1933. Before we explore the degree to which history is repeating itself, we’d like to explain our position on… Continue reading 1930s Redux